Upon arrival in Chile,Karen exchanged $1,000 of U.S.currency into 480,000 Chilean Pesos.While returning after her two-month visit,she exchanged her remaining 50,000 Pesos into $100 of U.S.currency.What amount of gain or a loss did Karen experience on the 50,000 pesos she held during her visit and converted to U.S.dollars at the departure date?
A)Loss of $4.
B)Gain of $4.
C)Loss of $6.
D)No gain or loss.

Question

Quizplus · Accepted Answer

Initially, Karen exchanged her money at a rate of 480 Chilean Pesos for 1 U.S. dollar ($1,000 = 480,000 Pesos). When she exchanged 50,000 Pesos back to U.S. dollars, she received $100, indicating a new rate of 500 Pesos for 1 U.S. dollar. Originally, 50,000 Pesos would have been worth $104.17 ($50,000 / 480 = $104.17). Thus, converting them back to $100 means she experienced a loss of $4.17, which is closest to a loss of $4.

Upon Arrival in Chile,Karen Exchanged $1,000 of U